Software company facts for kids

A software company is a business that creates, sells, and distributes computer programs, also known as software. These companies are a big part of the software industry. They can be owned by the government or by private people, and their main goal is to make a profit.

Types of Software Companies

There are many different kinds of software companies, each focusing on something special:

• Some companies sell ready-to-use programs called commercial off-the-shelf (COTS) products. You can buy these programs and start using them right away.
• Many companies offer services to develop software. They create special programs, called custom software, for other businesses that need something unique.
• Some companies make very specific COTS software for a particular group of users or a certain industry.
• Companies that provide Software as a Service (SaaS) let you use their software over the internet without installing it on your computer. Think of it like renting software.
• Other SaaS companies offer IT services or Cloud Computing services, which means they provide computing power and storage over the internet.
• Some companies create software components. These are like building blocks that other developers can use to create their own programs.
• Independent software vendors (ISVs) build and sell software directly to people or businesses who will use it.

People Who Work at a Software Company

Running a software company needs special skills. Good leaders can even turn challenges into benefits. For example, having teams in different time zones can allow work to happen around the clock! A testing team might be 8 hours ahead of the development team. This way, testers can find software bugs, and developers can fix them while the testers are sleeping.

A professional software company usually has at least three main teams:

• Business analysts figure out what the market needs. They talk to customers and understand what kind of software would be helpful.
• Software developers write the code and create the software. They turn ideas into working programs.
• Software testers make sure the software works correctly and has good quality. They try to find any bugs or problems.

In bigger software companies, there are often more specialized roles:

• Technical writers create helpful documents, like user guides, to explain how the software works.
• Release specialists prepare the final software product for release and manage different versions.
• User experience (UX) designers make sure the software is easy and pleasant to use. They think about how people will interact with the program.
• Graphic designers create the look and feel of the software, especially the buttons, menus, and overall visual style.
• Maintenance engineers provide support if users have problems with the software after it's released.
• Consultants help customers set up and use the software, especially for complex systems like business intelligence software.

How Software Companies Are Organized

The person in charge of a software company's development is often called the Head of Development (HOD). This person reports to the company's owners or main investors. They lead the different teams, either directly or through other managers. Teams of up to 10 people often work best.

In larger companies, there are usually two main ways to organize teams:

Typical structure of a software company

• Classic Structure: In this setup, each team works on its own projects. Everyone reports to one person, which makes things clear. However, it can be harder for teams to share knowledge or for the company to use its people in the best way across different projects.

Matrix structure

• Matrix Structure: Here, there are managers for each special skill (like all developers or all testers). These managers "lend" their team members to different projects, which are led by project managers. This means a team member might have two bosses: their skill manager and their project manager. This way, the company can use its people more efficiently, but it can sometimes lead to confusion about who is in charge.

Many companies use a mix of these structures, or they spread their teams across different departments.

How Software Is Made: Methodologies

Software companies use different methods to create their programs. These methods help them organize the work.

• The waterfall model is a traditional method where each step of the project is completed before moving to the next. It's like a waterfall flowing downwards.
• Agile methods are more flexible. They involve working in short cycles and constantly getting feedback. Examples include Extreme Programming and SCRUM.

Some methods combine parts of both, like the spiral model.

The Life of a Software Product

No matter which method is used, every software product goes through at least three main stages:

• Design: This is where the team plans what the software will do and how it will work.
• Coding: Developers write the actual program code.
• Testing: Testers check the software to make sure it works correctly and meets all the requirements.

Ideally, each of these stages takes about 30% of the total time, with 10% kept as a reserve for unexpected things.

The general interaction between the four main groups

Even though each stage has a main team, all teams are involved throughout the process:

• Analysts help guide the project from start to finish, making sure the software meets the business needs.
• Programmers also help with the technical design and fix any bugs found during testing.
• Testers create test plans during the design phase and then test the software during the coding phase.

Tools and Procedures

Software companies use many different tools and procedures to help their teams work together smoothly.

For Business Analysts

• They use special modeling tools to create diagrams and plans for the software.

For Programmers

• Version control systems help them keep track of changes to the code and work together without overwriting each other's work.
• Code analysis tools check the code for errors and make sure it follows certain rules.
• Deployment mechanisms help them get the finished software ready for users.

For Testers

• Bug tracking systems help them record and manage all the bugs they find.
• Test automation tools can run tests automatically, saving time.
• Performance and stress test tools check how well the software works under heavy use.

For Project Managers

• Project management systems help them plan, track, and manage all the different projects.
• Product portfolio management helps them decide which products to develop.
• Change management systems help them handle any changes that need to be made to the project.

There are also all-in-one systems called Application Lifecycle Management (ALM) tools that combine many of these features for all the teams.

How Companies Check Their Work

Good software companies often measure how well they are doing. They use special measurements called key performance indicators (KPIs). These might include:

• How many bugs a developer creates over a certain time.
• How many bugs a tester finds.
• How long it takes to fix all the bugs.
• How accurate their time estimates are for tasks.

Pyramid showing risk, time, and financial cost of introducing changes

Many companies try to reach a certain level of the Capability Maturity Model (CMM), which helps them improve their processes. Other systems like ISO standards also help companies make sure their work is high quality.

Smaller companies often use simpler ways to manage their work. Every company finds its own way to balance strict rules with flexibility. However, all companies understand that making changes later in a project can cost more money and time, and also increase risks.

See also

• List of the largest software companies